Regulatory changes will enable growth and connectivity
Located in the southwest Pacific Ocean of Melanesia and only about 160kms north of Australia lies the mainland of Papua New Guinea and around 600 outlying islands. The western half of the mainland adjoins the New Guinea Island, which is part of Indonesia. The topography of the island is mountainous and tropical with the majority of the land under customary land ownership.
Subsistence based agricultural products, mining and petroleum products are among the largest export industries. The massive mineral developments planned and in progress over the coming decades require advanced communications necessary to trade on the global stage. The LNG project about to come online in 2014, has been estimated that it may double the GDP of the country over its operational life. The project construction has seen its share of environmental misfortunes and total construction cost would be around US$20 million. The inflation rate of around 8% and a current fiscal deficit of K2-3 billion are also driving forces that the government must harness to move the country forward.
Even though Papua New Guinea has a relatively advanced telecom network compared with many other developing nations, tele-density and fixed-internet penetration remains very low as nearly 90% of the population live outside the major cities. To oversee the growth in communications across the country the three mobile network operators (MNOs) have increased accessibility to the mobile network from less than 3% population availability to more that 80% in less than a decade.
The privately operated Digicel has been the champion in regard to this task. The government owned and part-government owned mobile network operators have been slow to increase their mobile infrastructure. The regulator, NICTA, will no doubt mandate that network sharing of mobile and other essential infrastructure occur to minimise costs while increasing choice to the consumers and businesses and bring communications and broadband connectivity to the majority of the population.
An essential part of connectivity would be the fibre-optic network that is now part of the National Transmission Network (NTN) project. The NTN would utilise existing fibre infrastructure and gateways and also have new fibre routes as part of upgrading the backbone network. The incumbent Telikom will see its whole of country operations instead turn to that of a Retail Service Provider (RSPs) with a government owned NetCo' operator providing the wholesale services to RSPs.
In 2011 Digicel was granted additional licences by the NICTA, allowing the possibility of a second fixed-line operator in the country as Digicel also gained an international gateway licence. But telecoms infrastructure is limited to the major urban centres leaving the majority of rural areas poorly served. The additional licences that Digicel has may see this change as they deploy further next generation services while the wholesaling of the backbone network has not even passed the final planning stages.
Elections in 2012 saw a change in government with a priority in enabling the nation. In the longer term the possibility that economic progress will now filter to the rural areas of the country will come from the increase in GDP and from the years of earnings that mining and minerals have provided others.
Please note that this report is updated infrequently due to limited availability of information on the local telecoms market.